There are rumors that due to poor performance, the annual meeting in China was cancelled; in the annual report meeting in Seattle, executives in China always spoke last and had the shortest time.
Yesterday, Amazon China, which has not heard for a long time, confirmed that it will stop providing seller services for third-party sellers on July 18 this year, and will retain cloud computing, Kindle and cross-border trading business in the future.
In the face of the local competitors with changing patterns and playing tricks, its fall behind seems to be inevitable, and the retreat is only a matter of time.
A good hand is beaten up, Amazon China e-commerce, in the end who is destroyed?
"In China, Amazon is not playing!"
A terrible shopping experience, the research director Eastland of a certain media is very upset. In July 2018, he ordered four items on Amazon.
One of them is a brand red teeth device, which belongs to the popular products of “self-operated overseas”. However, it was discovered after receiving the goods that the voltage used was actually 110 volts. Ask Amazon customer service, the other party allows users to buy transformers themselves, but no product links are provided. "Since it is sold to China, why not use 220 volts? This brand sold on Tmall is equipped with 220 volts."
What is even more tragic is that when the transformer was purchased from a local e-commerce, the product was found to be unusable. Want to return, customer service to send pictures to a designated mailbox, the next is endless waiting.
Eastland believes that Chinese users have been “spoiled” by local e-commerce, and that Amazon has used emails and its after-sales service is really worrying.
The story is not over yet.
The other cargo is a golf GPS watch, which is a best-selling product of “overseas self-operated”, and the tax price is 300 yuan more than the local e-commerce. Its biggest selling point is that it can provide fairway maps and technical data for more than 40,000 golf courses.
After receiving the goods, I found that several stadiums in Beijing were not displayed, including the National Games in China. “The original so-called 40,000 globally, I am afraid that three-quarters of them are in North America. The ‘American bestseller’ is not necessarily suitable for Chinese users. Is there not much in Amazon’s mind?”
Choosing a return, let the user express it to somewhere in Las Vegas, and the domestic express company can't air by the built-in lithium battery... "Since the e-commerce business has entered China, you can't set up a transfer station in China. Is it easy to accept returns?"
There is also a product, although it is not delivered, the order status shows "Start Return".
This may be an extreme shopping experience, but it is not difficult to see the problem:
First, Amazon's pre-sales and after-sales service systems are lacking. There is no user evaluation before the sale, and the after-sales service is ineffective.
Second, Amazon China lacks basic research on domestic consumers and lacks localized content.
Third, the product still has quality problems, and the price has no obvious advantage.
"Amazon, what attracts Chinese consumers to shop here?" he asked.
In fact, the Tucao Amazon is by no means a minority. According to the Sina Black Cat complaint, on the Amazon China e-commerce platform, unilateral cancellation of orders, the sale of second-hand or expired goods and other issues have occurred, a large number of users are dissatisfied with their service attitude and inefficient feedback.
In comparison, the customer service system of Chinese local e-commerce is relatively complete, at least the instant messaging can be used to send pictures, and there will be no strange cases in which “goods are sent back to the United States”.
More importantly, technology and ecology for the optimization and improvement of the shopping experience: local e-commerce, whether it is a detailed page of short video content, or intelligent algorithm-based AI customer service has been very common, coupled with the emerging live broadcast ecosystem, etc., further Promote consumption potential. At the same time, through the analysis of user behavior through big data, algorithm recommendation has become the "standard" for e-commerce.
All of this has left Amazon China behind.
Buyers are constantly voicing, and sellers are not happy.
"Now even if I participate in activities, sales are average. The feeling for me is that I am not hungry here, but I am absolutely not enough." Ms. Wang, the director of an outdoor brand in China, told Sina Technology that in 2012, the brand entered the Chinese market. Amazon is the first choice. "The boss is an American. If you don't understand the domestic situation, you can name it in Amazon. This situation is very common for foreign small and medium-sized brands."
Around 2013, the brand held a large amount of money to operate Amazon China stores.
Ms. Wang recalled that at the beginning, Amazon China’s activities were mostly free. Whether it’s “second kill” or “town store treasure”, sales have good results. Later, Amazon changed its business model and implemented a payment system. "At that time, 20,000 yuan a package containing N spikes."
The strange thing is that after paying for the event, the sales volume has dropped.
“I was very impressed. I also had a separate meeting for this.” Ms. Wang said that the team’s research found that small brands were shoddy after paying, resulting in a surge in numbers and spikes in dozens of spikes. “ A lot of good products, after being discharged into many pages by the system, the exposure is naturally low."
She revealed that since April 2018, Amazon China suddenly stopped third-party merchants from entering the warehouse, and did not explain too much; in August of the same year, the notice issued no longer provided logistics seller services for third-party merchants. "We think this is likely to be the beginning of 'exit China' and it has been brewing for a long time."
"Everything is not accidental, it is inevitable." In her view, the reason why Amazon retreated is concentrated in three points:
First, Amazon's customers are relatively high-end, and a certain percentage are international students who are used to shopping in Amazon. However, with the rise of local cross-border e-commerce, whether it is Tmall,JingdongOr the new NetEase koala and Xiaohongshu, the content is more and more rich, and the style of play is also diversified. In comparison, Amazon loses its advantage and users are difficult to keep.
Second, Amazon has some “self-defeating”. Local e-commerce activities, will go to other sites to do the drainage, while at the same time heavy advertising, increase the momentum of the event. In this respect, Amazon is very lacking, and the activities are like "closed doors," and the volume is not large.
Third, since third-party merchants cannot enter the warehouse, they lose the advantage of delivery speed and lack price advantage, and buyers and visitors are bound to decrease.
"You look at the App now, the sales of the active products on the homepage are very few, not to mention the ordinary products, where is the competitiveness?" Ms. Wang complained.
At the same time, she is also somewhat anxious. After all, the team has been operating in Amazon for many years. After entering the local platform, “how to face diversified competition” is a compulsory course at the moment.
From hard work to numbness
In the eyes of Amazon Chinese insiders, the days of these years are not good. Some details reflect the state of existence of the business.
"When we opened the annual meeting, it was at the International Trade Hotel, and later it was replaced by the university stadium. Finally, we were fortunate to cancel it directly. The prize for the annual meeting was also the worst bottle of red wine, which was later replaced with olive oil. It’s the charging treasure charging line, and finally the sun is gone.” Knowing that a former Chinese employee of the Amazon, Kim, told Sina Technology, in 2018, Amazon China contracted, the operation team cut directly, and the overall staff fell. More than 50%, the team is only seven or eight hundred people. At the same time, the warehouse area was cut in half, and finally there were only three cities in Beijing, Kunshan and Guangzhou.
Kim revealed that Amazon advocates simple styles, such as departmental meetings in previous years. Many people are used to not doing PPT, and they use Word to elaborate. Similarly, this style is also reflected on the website. "You can see the page and the gap between Taobao and Jingdong's dazzling product pages."
Some Amazon employees have also worked hard on this.
Kim admits that for relatively simple UI (user interface), internal staff has repeatedly proposed changes, but each time the headquarters response process is very slow, a detail should be repeatedly communicated by mail, plus the time difference between China and the United States, the efficiency is extremely low "The meaning of the headquarters is very clear, and the page styles of all countries and regions must be unified." In other words, localization and personalization are not supported. Over time, employees become very numb.
After leaving Amazon, Kim worked in a local e-commerce for a short period of time. "Supervisors often let us work overtime to change the UI to cater to user needs. This difference (and Amazon) is too big."
More interestingly, the Internet has also exposed an Amazon interview. Ask a brand to enter China, how to persuade it to enter Amazon? Many netizens' responses are straightforward: they won't choose. They ask, do not change for the Chinese people, why choose?
Today, Amazon will usher in a new wave of layoffs.
Yesterday morning, China convened a meeting of employees from various departments. During the brief meeting, the company thanked all the employees for their hard work and contributions, and officially announced the company's business adjustment and layoffs. Some executives revealed that Zhang Wenzhao, president of Amazon China, will also leave.
Amazon's response is also quite succinct, saying that due to the integration and optimization of business resources will involve changes in some positions, but the specific details can not be disclosed.
Who is the culprit?
According to the report, in the Chinese market, Amazon's market share has now dropped from 20% in the glory to 0.6%.
Why is it "fallen"? Jingdong CEO Liu Qiangdong said in the program that the core feeling of Jingdong’s competition with Amazon was that Amazon lacked trust in its Chinese team. “It’s like a soldier fighting in front, and asking for a bullet is enough.” I will give me a bullet and give me a bullet. This will not be able to fight. The market in China will change rapidly. If there is no large-scale authorization on the front line, there will be problems."
For a long time, Amazon China’s general managers were foreigners and foreigners who lacked Chinese life experience. Since 2005, Wang Hanhua has been responsible for Amazon China, and then experienced two foreign executives. Zhang Wenxi, a female servant, took office in 2016.
Long-term foreigners are at the helm, and strategic deviations are inevitable. Looking back at the golden decade of e-commerce development, 2012 is a watershed.
This year's 8.15, Ali, JD.com,Suning,GomeFighting in the price war. Liu Qiangdong suddenly announced on Weibo that “Jingdong’s electricity products will have zero profit in the next three years” and will use Weibo as an exporter to reduce the price. Suning was not willing to show weakness, and immediately announced his participation in the war.
However, Amazon's strategy is: not to participate in the price war, because the price war is a flicker, non-sustainable way. At that time, the headquarters believed that low-price promotions did not meet long-term interests and did not like behaviors that only pursue short-term interests.
Ever since, Amazon China has stayed out of this battle. After the "smoke" dissipated, Jingdong began to gradually establish the status of home appliance e-commerce.
More importantly, the price war also contributed to the e-commerce festival, whether Ali's double 11, JD.com 6.18, etc., the foundation for the establishment and promotion of price advantage. Because of this, people began to accept and know these e-commerce, finally established the status of Ali and JD.com.
Mistakes in decision-making and cultural differences between the two countries have caused Amazon to remain at a disadvantage in competition with local e-commerce.
Again, this disadvantage continues in cross-border e-commerce. Unlike Ali and JD.com, which are pushing “low-priced explosions”, Amazon has always followed the “precious quality” route, which is not in line with the current market conditions, and ultimately led to a decline in market share.
All of this, the then senior vice president of Joyo.com is very thorough.
After he founded Vanke Eslite, he briefly commented on Amazon's "disadvantages." He said, "Americans basically don't listen to you. It is really too difficult to make a Chinese market plan that suits your understanding."
How far can I go after the "broken arm"?
Of course, the decline of e-commerce in China does not mean that it is full of losses. It is still the world's largest e-commerce company.
In 2018, Amazon's annual revenue was 232.9 billion US dollars, an increase of 31% year-on-year. The average annual salary of full-time employees is even as high as 100,000 US dollars. Among them, Amazon AWScloud serviceRevenue was $25.555 billion, a year-on-year increase of 47%, making it the department with the highest operating income.
Cloud computing, Kindle and cross-border business will be preserved in the future. How far can the Amazon go after the Broken Arm?
The first is AWS. According to the cloud infrastructure service market data released by Syergy Research, in the 2018Q4 China market,Ali CloudRanked first with a market share of 40.5%, Tencent followed suit with a 16.5% share, AWS ranked third with a market share of 9.7%.
Although leading the global cloud computing market, in China, AWS still has a big gap with Alibaba Cloud. The latter's localized service and ecology have built up barriers in China, and other manufacturers are difficult to overcome in the short term.
Next is the Kindle, which focuses on digital reading and is another ace of Amazon.
According to public information, as early as 2016, China has become the world's largest market for Kindle device sales. At the same time, Kindle has cooperated with hundreds of domestic publishing companies. E-book selection has grown rapidly in the past few years and is currently available. More than 10,000 Kindle e-books, and has launched KU monthly service and Prime reading.
Although facing from the palm of the countryMobile phoneReading and other competition, at present, the Kindle is still a big one.
Finally, cross-border e-commerce business. Although Amazon has a natural advantage, it still faces the challenge of local e-commerce. According to Analysys monitoring data, China’s cross-border export e-commerce transactions reached 7.9 trillion yuan in 2018. Among the domestic third-party data, Tmall International and Netease Koala have a very high share of cross-border e-commerce.
In recent years, local e-commerce companies have begun to gradually develop cross-border business, which will further "eat away" Amazon's market share, opportunities, pressures and challenges in this field.
Sina Technology Han Dapeng